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Get your Finances in Order.
It’s time to clean house per say. Ever notice how when where your life is full of clutter and disorganized, our mind is in disarray? Same thing happens when we don’t know what we are spending on a periodic basis. It’s a funny yet concerning fact that a majority of people do not know what they are spending even a monthly basis. The biggest issues that can arise from this is the fact that a person can spend more than he brings in income for the month, resulting in debt climbing exponentially over time.
The most concerning fact is the majority of people when they shop usually do so with the aid of plastic money as I like to call it or credit cards. Are you one of these people? It’s a fact that when you rely on purchases with a credit card, on average you spend a good percentage wise more than if you were using cash to pay for items. One of the best things to do for your wallet is to carry cash and a debit card to make purchases. On average, you will spend less than credit cards because you are more mindful of the money you are spending in the now. I call it ‘pain attached to process’. When there is a level of pain attached to your spending you will likely spend less and save more so let that be a lesson to you if you haven’t already started this important step.
Next thing you want to start is to journal all your spending. Carry around a little notebook with you. If it’s even a box of tic tacs, write it down. Go over your journal weekly and add up your expenses to get a grip of what you are spending vs. your income. Over time, you will see holes where you can cut back on spending. Do yourself a favor, take the money you could save from cutting out on bad spending and open yourself a safe FDIC insured bank account. Get one with the highest interest savings rate you can find. HSBC online and a few other institutions offer good rates. Do your research on the best ones. For the time being you just want to grow this account and let the power of compounding interest to make it grow even more. The trick is to move this money into an even better investment with slightly better returns than your original savings account. This will become one of your golden nuggets towards a life of financial freedom. Do this in other areas of your life as well. You need to become a better financial manager if you haven’t already.
Let me just say to you, if you are not on at least a budget to know where your outgoing cash flow is going, you are committing financial suicide. Like any good accountant knows, you need to know your outgoing cash flow needs. When you have these numbers, you in turn know where you can further cut some expenses. This is pivotal to getting a grasp and control of your finances. Put yourself on a strict budget for a few months, after some time, it will become second nature to you. The idea is to maximize your income by cutting expenses. Also, make sure to discern between needs vs. wants. Ask yourself for every purchase, “Is this something that I really need or is it a want”. Start with the basics and you will at least change gears and switch direction on the road to financial independence and abundance!
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Close your eyes for a minute, what could you do if were truly free? Can you picture the long walks on the beach, more free time for hobbies like golf or even writing a book? How does the air feel? What smells are you taking into your senses? Visually, what do you see?
